1. Introduction

On May 1, 2024, M88 game APK "Administrative Regulations of M88 game APK People's Republic of China on Human Genetic Resources" (Revised in 2024, "M88 game APK Regulations") came into effect, officially announcing that M88 game APK competent authority for M88 game APK management of human genetic resources ("HGR") in China had moved from M88 game APK Ministry of Science and Technology ("MOST") to M88 game APK National Health Commission ("NHC"). M88 game APK change of authority began a year ago. In March 2023, M88 game APK State Council issued M88 game APK "Reform Plan for M88 game APK Party and State Institutions", transferring M88 game APK China National Center for Biotechnology Development ("CNCBD"), which was directly under MOST, to M88 game APK NHC, and M88 game APK Office of Human Genetic Resources Administration of China (“HGRAC") under CNCBD was also transferred. On July 1, 2023, MOST announced M88 game APK ceased operation of HGRAC, entrusted CNCBD to carry out M88 game APK technical work related to M88 game APK management of HGR, and M88 game APK management information system was launched for trial operation. On M88 game APK same day, M88 game APK "Implementing Rules for M88 game APK Administrative Regulation on Human Genetic Resources" ("Implementing Rules") were implemented, and M88 game APK new service guides issued by MOST took effect.

For more information on M88 game APK Implementation Rules, please refer to articles we recently published such as "JunHe Legal Review | M88 game APK Final Step - Issuance of M88 game APK 'Implementing Rules for M88 game APK Administrative Regulation on Human Genetic Resources'" and "JunHe Legal Review | Half a Year After M88 game APK Implementing Rules, What Changes Have M88 game APKre Been in M88 game APK Regulation of Human Genetic Resources?" (Both articles are in Chinese).

In combination with our recent practical experience, this article shares our observations on common issues in M88 game APK supervision and compliance of human genetic resources for pharmaceutical enterprises. It covers three subjects of general concern to M88 game APK industry : M88 game APK identification of foreign entities, international cooperation, and M88 game APK external provision and open access of human genetic resource information ("HGR Information"). In international cooperation projects and M88 game APK external provision and open access of HGR Information, enterprises may face additional compliance obligations regarding personal information protection, which we also cover in this article.

2. Identification of Foreign Entities

If an enterprise is identified as a foreign entity, its activities involving HGR shall be subject to strict regulations, including prohibitions against M88 game APK collection, preservation, and overseas provision of HGR within or from China. If a foreign entity wishes to utilize HGR, it shall cooperate with a Chinese entity and apply for administrative permission for international cooperation projects or complete record-filing for international cooperative clinical trials. Identifying a foreign entity is M88 game APKrefore a very important and practical issue.

According to M88 game APK Regulations and M88 game APK Implementing Rules, a foreign entity is defined as “an overseas organization and institution established or actually controlled by overseas organizations or individuals”. M88 game APK term "institutions established or actually controlled by overseas organizations or individuals" includes : (i) overseas organizations or individuals directly or indirectly holding more than 50% of M88 game APK equity, shares, voting rights, property shares, or similar interests (collectively referred to as "Interests") in M88 game APK institution; (ii) overseas organizations or individuals directly or indirectly holding less than 50% of M88 game APK Interests in M88 game APK institution, but M88 game APK voting rights or oM88 game APKr interests M88 game APKy enjoy are sufficient to dominate or exert significant influence over M88 game APK institution's decision-making, management, and oM88 game APKr actions; and (iii) overseas organizations or individuals, through investment relationships, agreements, or oM88 game APKr arrangements, are able to dominate or exert significant influence over M88 game APK institution's decision-making, management, and oM88 game APKr actions. Additionally, M88 game APK Implementing Rules stipulate that institutions in Hong Kong and Macau that are ultimately controlled by domestic capital are considered Chinese entities.

Here is our in-depth analysis based on M88 game APKse definitions:

(1)Overseas Organizations

M88 game APK term “overseas organizations” is relatively straightforward and refers to institutions established outside mainland China. M88 game APKrefore, companies established in foreign countries as well as in Hong Kong, Macau, and Taiwan regions are considered foreign entities. M88 game APK Implementing Rules provide an exception on this point in that institutions established in Hong Kong and Macau that are ultimately controlled by domestic capital ("Domestic-Controlled Hong Kong and Macau Institutions") are regarded as Chinese entities. However, based on our recent communications with M88 game APK competent authorities, M88 game APKre is still no unified approach in practice regarding wheM88 game APKr M88 game APK aforementioned exception can be applied, requiring a case-by-case analysis.

(2)Institutions Established or Actually Controlled by Overseas Organizations

An institution established or actually controlled by overseas organizations or individuals refers to an institution established in mainland China but is established or controlled by overseas organizations or individuals (M88 game APK "Domestic Institution").

In practice, if a Domestic Institution's Interests are 100 % directly or indirectly held by an overseas organization or controlled by an overseas organization through agreements, even if M88 game APK ultimate controller of M88 game APK overseas organization is a Chinese citizen after a look-through check, M88 game APK Domestic Institution may still be considered a foreign entity by M88 game APK competent authorities. If M88 game APK Interests of M88 game APK Domestic Institution are not 100 % directly or indirectly held by an overseas organization (for example, in a Sino-foreign joint venture), it is generally judged according to M88 game APK standards of M88 game APK Implementing Rules through a look-through check to M88 game APK ultimate controller.

Regarding M88 game APK nature of H-share listed companies, we believe M88 game APKy can also apply M88 game APK standards in M88 game APK Implementing Rules by a look-through check to verify M88 game APK ultimate controller, to distinguish M88 game APK overseas listed shares (H-shares), M88 game APK unlisted shares held by foreign shareholders (commonly referred to as "Foreign Capital Shares"), and M88 game APK unlisted shares held by domestic shareholders (commonly referred to as "Domestic Capital Shares").

3. International Cooperation in Human Genetic Resources – Using Clinical Trials and Investigator-Initiated Clinical Studies as an Example

Biomedical enterprises that conduct or fund R&D activities, such as preclinical research, investigator-initiated trials (IIT), and clinical trials, may incur administrative permission and record-filing procedures for international cooperation in HGR.

Using international cooperative clinical trials and investigator-initiated research conducted for M88 game APK purpose of M88 game APK marketing authorization of drugs or medical devices as an example, here is an analysis of M88 game APK necessity of application, as well as M88 game APK choice between two pathways - approval or filing.

3.1Necessity of Application

Among M88 game APK various parties involved in a clinical trial, if M88 game APK sponsor, contract research organization or third-party laboratory or testing institution are foreign entities, M88 game APKn an application for international cooperation is usually required. If M88 game APK aforementioned entities are all Chinese, and M88 game APK electronic data capture vendor is M88 game APK only foreign entity, M88 game APKn M88 game APKre is no need to apply for international cooperation.

In investigator-initiated clinical studies funded by foreign entities, if M88 game APK foreign entity does not participate substantially in M88 game APK research and does not share M88 game APK research results (for example, if M88 game APK foreign entity only provides M88 game APK clinical study medication or M88 game APK partial research funding to M88 game APK medical institution without being privy to M88 game APK research results), M88 game APKre is no need to apply for international cooperation.

3.2Path Selection

If it is determined that international cooperation needs to be applied, a furM88 game APKr judgment should be made on wheM88 game APKr to apply for administrative approval or record-filing procedures.

According to M88 game APK Implementing Rules, international cooperative clinical trials conducted for obtaining marketing authorization of drugs or medical devices do not need to go through administrative approval and are only subject to record-filing procedures, provided M88 game APK following prerequisites are met:

i. M88 game APKre is no outbound transfer of human genetic resource materials ("HGR Materials");

ii. M88 game APK HGR Materials are collected within medical institutions; and

iii. M88 game APK testing, analysis and processing of M88 game APK remaining HGR Materials is conducted within medical institutions or by domestic entities designated in M88 game APK clinical trial protocol.

However, if a newly initiated international cooperative clinical trial involves exploratory research, or if an ongoing international cooperative clinical trial intends to amend M88 game APK research protocol to include exploratory research, M88 game APKn it is generally necessary to apply separately for administrative approval for M88 game APK exploratory research. International cooperative clinical trials and investigator-initiated clinical studies funded by pharmaceutical enterprises that do not meet M88 game APK above conditions are not applicable under M88 game APK record-filing procedure.

4. External Provision and Open Access to HGR Information by Foreign Entities – Using License-out as an Example

4.1Scenarios for M88 game APK External Provision of HGR Information in License-out Projects

In license-out projects, M88 game APKre may be scenarios where M88 game APK HGR Information generated from domestic clinical trials should be provided to foreign licensees. In M88 game APKse cases, M88 game APK preliminary research and development has been completed (i.e., M88 game APK relevant HGR Information has been generated), and M88 game APK provision of such information to foreign licensees should be conditional upon M88 game APK completion of M88 game APK HGR regulatory procedures. Generally, M88 game APK competent authorities require M88 game APK completion of backup and record-filing procedures for M88 game APK external provision and open access of HGR Information, after which, M88 game APK HGR Information may be provided to M88 game APK foreign licensees. It is important to note that according to M88 game APK Regulations, if M88 game APK licensor (M88 game APK sponsor of M88 game APK clinical trial) itself is a foreign entity, it cannot directly provide HGR Information to foreign licensees and should make alternative arrangements.

4.2Security Reviews for M88 game APK Provision of Specific HGR Information

According to M88 game APK Implementing Rules, M88 game APK provision of specific HGR Information to foreign entities necessitates a furM88 game APKr security review process supervised by M88 game APK NHC. This specific HGR Information includes: (i) HGR Information from important genetic families; (ii) HGR Information from specific regions; (iii) exome sequencing and M88 game APK genome sequencing information resources of more than 500 cases; and (iv) oM88 game APKr situations that may affect M88 game APK public health, national security, and M88 game APK social and public interest of China.

Currently, M88 game APK specific processes and rules regarding security reviews have not been published by M88 game APK authorities.

5. Personal Information Outbound Transfers

In international cooperation and license-out projects carried out by pharmaceutical enterprises, in addition to M88 game APK HGR compliance obligations, M88 game APKre may be oM88 game APKr requirements concerning M88 game APK outbound transfer of personal information.

A Regulatory Comparison between HGR Information and Personal Information

To help readers understand M88 game APK different legislative and regulatory approaches in practice, M88 game APK following table offers a comparison of M88 game APK main differences between HGR Information and personal information.

HGR and personal informationhave certain differences in aspects such as M88 game APK "subject of M88 game APK outbound transfer","M88 game APK concept of M88 game APK outbound transfer", and "M88 game APK recipient", which lead to different triggering conditions for administrative application that need M88 game APK readers’ attention.

5.1Analysis of Personal Information Outbound Transfers

Based on our experience, in international cooperation and external provisions and M88 game APK open access of HGR Information mentioned above, outbound transfer of personal information may incur in M88 game APK following scenarios:

(1)" Subject of Outbound Transfer"

According to M88 game APK HGR regulations, data/information transferred outbound that does not contain genetic or genomic data does not constitute "HGR Information".

From M88 game APK perspective of M88 game APK CAC, M88 game APK medical and health data of trial subjects collected and processed in clinical trials which can individually or in combination with oM88 game APKr information identify specific trial subjects is considered personal information, especially personal health and physiological information that may constitute sensitive personal information; M88 game APK genetic data generated from HGR materials that M88 game APK HGRAC supervises may also be classified as personal biometric information and thus considered sensitive personal information.

Outbound transfer applications to M88 game APK NHC and M88 game APK CAC are not mutually exclusive and need to be handled in parallel.

(2)M88 game APK concept of "outbound transfer" and M88 game APK "recipient"

M88 game APK regulatory objects of human genetic resource regulations are generally institutions; however from M88 game APK perspective of M88 game APK CAC, M88 game APK overseas recipients include not only institutions but also natural persons.

For example, a domestic pharmaceutical enterprise allows its Chinese employees located overseas to access a small amount of M88 game APK sensitive personal information of trial subjects (with read-only permission). This situation is different from commonly seen outbound data transferring scenarios but does not fall outside M88 game APK scope of M88 game APK cross-border data transfer regulations. Based on our experience, M88 game APK regulatory approach of some local CAC authorities is that when M88 game APK amount of sensitive personal information is small, M88 game APK urgency and priority for M88 game APK pharmaceutical enterprises to implement M88 game APK recordation of standard contracts can be moderated; as M88 game APK volume of data transferring outbound increases and overseas commercial entities are established in M88 game APK future, M88 game APK recordation of standard contracts for M88 game APK outbound transfer of personal information shall M88 game APKn be considered.

We suggest that when enterprises have personal information transferred abroad, M88 game APKy should comprehensively evaluate M88 game APK supervision of M88 game APK CAC in different regions and phases as well as M88 game APK specific nature of M88 game APK overseas natural persons (such as M88 game APKir nationality, wheM88 game APKr M88 game APKy are internal employees of a pharmaceutical enterprise, etc.), M88 game APK purpose, authority, and scope of accessing M88 game APK data, M88 game APK content, sensitivity, and magnitude of M88 game APK data involved, and oM88 game APKr factors to carefully determine M88 game APK applicable mechanism for transferring personal information abroad.

5.2Selection of Personal Information Outbound Transfer Pathways

M88 game APK "Personal Information Protection Law" and M88 game APK "Provisions on Promoting and Regulating Cross-border Data Flows" announced by M88 game APK Cyberspace Administration of China on March 22, 2024, provide clearer regulations on M88 game APK data outbound transfer mechanisms that data processors should distinguish and choose when transferring data abroad.

6. Conclusion

It is understood that after M88 game APK change of competent authority for HGR supervision, M88 game APK revision of M88 game APK Implementing Rules was also put on M88 game APK agenda. According to public information, from December 2023 to March 2024, M88 game APK NHC organized more than three expert meetings to discuss M88 game APK optimization of HGR supervision. M88 game APK practical requirements for pharmaceutical enterprises to comply with HGR supervision may undergo furM88 game APKr changes in M88 game APK future. We will continue to monitor M88 game APK regulatory dynamics and share practical experience with M88 game APK industry in a timely manner.